The bank's wealth and superannuation businesses remained in the commission's cross-hairs for a third day with the former chairwoman of NAB's NULIS super trustee business Nicole Smith rejecting a claim the business was "hopelessly conflicted".

"I believe it was a conflicted position. I do not agree it was hopelessly conflicted," Ms Smith said.

There was a vigorous exchange between Commissioner Hayne and NAB's legal counsel.
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Commissioner Kenneth Hayne put the sector on notice when he asked Ms Smith if she had considered whether collecting fees for services it didn't provide would expose the bank to a civil or criminal proceeding.

Finance Sector Union of Australia national secretary Julia Angrisano said the hearings were evidence of deep and systemic issues at the bank.

"Charging fees for no service is bad enough but when a bank starts charging dead people for financial advice, it represents a new low," Ms Angrisano said.

NAB has admitted to charging dead people for financial advice.
David Rowe

'You recognise, don't you'

NAB's decision to persist with the grandfathering of commissions that were banned under future of financial advice changes and how this was in keeping with Ms Smith's role as trustee and her duty to act in the best interests of the fund's members was also explored in detail.

"You recognise, don't you, that it is not in the best interests of members to be paying commissions?," Mr Hodge asked three times before he got the answer he wanted.

"I think it is in the best interests of members to have fees that are as low as they can possibly be, and that the member has control over the fees and the services and the features that they are paying for," Ms Smith said.

"That would be inclusive of, it is in the best interests of members to be in products that do not pay commission versus products that do pay commission."

NAB was also skewered for dragging its feet over the implementation of a government initiative to deliver low-cost superannuation called MySuper.

Counsel assisting Michael Hodge, QC, asked why NAB waited until the last minute to transfer all eligible members from a high fee account to a low fee MySuper account.

NAB transferred a total of 5 per cent of eligible members to MySuper each quarter starting in 2014 before transferring the remaining members in 2016.

Ms Smith said this strategy was chosen as a safe and appropriate way to handle the transfer and ensure that no errors or issues arose.

"Now, one of the consequences of that - or the speed with which the transition occurs, can I suggest, is that more members remain for longer in a higher fee-paying ADA before moving over into the MySuper product?" Mr Hodge said.

Ms Smith was also the centre of a vigorous exchange between Commissioner Hayne and NAB legal counsel Neil Young, QC, when he suggested Ms Smith needn't return for more questioning because she did not have any involvement with a disputed document.

"You will not give her her answer. You will not. Do you understand me?" Commissioner Hayne ordered.